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The Financial Services Industry has gone through a rapid and significant digital transformation journey in the financial year 2020-21 viz. Digital Adoption, Cognitive Automation, Conversational Servicing, Video KYC, and open banking etc. The need for digital
technologies is gaining momentum in the financial services industry and innovation is going to play a significant role in accelerating the creation of new digital financial products. Financial institutions have extended their market share through open finance
and open data strategy. New business models have been introduced, such as banking as a service, payments as a service, insurance as a service. In the year 2022, they will continue the innovations with purpose led initiatives such as global sustainability practices
and ESG. This blog will shed light on ideas which are going to transform the financial services industry such as banking, insurance, wealth, and superannuation in 2022.
Open Data Economy
New business models will evolve with the investments on open banking and eco system play. Financial services institutions will also customise, and design new products features for selling it through other marketplaces and channels. Open Data Economy will
help organisations to provide contextualised, personalised services to their customers with the help of data sharing between financial and non-financial institutions. Retail Digital Marketplace service providers will make the financial services products more
accessible to their consumers as part of their purchase journey by embedding features like auto insurance, content insurance, personal loan, auto loan, mortgage and buy now pay later. This will lead to new business model innovations, essentially cross industry
leverage of capabilities.
Digital Innovation in Small Business banking
Banks continue to be one of the primary sources of credit for small and medium businesses (SMBs) around the world. However, increased competition from fintech’s and neo banks in the last few years is forcing mainstream banks to explore ways of making themselves
more relevant to their SMB clients. Some of the small business owners have been impacted on cashflows by the latest market crisis and drop in sales due to consumers uptake in digital adoption channels. Banks need to reimagine their digital innovation journey
to capture the opportunities in small business banking. With the help of digital capabilities, small business owners can manage their cashflow & forecasting insights. Additionally, the provision of instant financial and non-financial servicing query facilities
through conversational technologies, assistance in digital marketing for personalised campaign to target their consumer segments, integrated framework to capture the upcoming regulatory requirement on ESG will significantly improve the experience of the SMB
clients. Management of carbon footprint from procurement & waste and mental health support through AI enabled digital tools are other areas where banks can help the small business owners.
Product Innovation in Sustainable Financing
In 2022, Banks will accelerate their journey for ESG products and offerings, like green loans, mortgage, banking accounts with carbon tracking features. Insurers will extend the existing telematics driven usage-based insurance to ecofriendly driving. Insurers
will include ESG factors into risk assessment and underwriting to target new types of risks such as coverage for renewable energy generation equipment. Financial Services will measure the impact of climate risks to meet obligations to depositors, policyholders,
and superannuation fund members.
Digital, AI and Cloud
Potential opportunities to digitise the onboarding, Underwriting, Servicing, Backoffice operations through Low Code No Code platforms exist. Vendors will compete to provide industry-specific cloud solutions to banks, insurers, investment firms. Wealth and
Superannuation companies will have AI based improved decision-making features for funds and their customers. Targeted marketing, personalised communications to improve customer support, financial literacy for responsible investment and omni channel experience
are the key priorities for wealth management and superannuation.
In 2022, The financial services industry will be more collaborative, intuitive, and purposeful.
Financial Services
